Craig Wilson, a senior associate with law firm CMS in Aberdeen, discusses energy transition and the oil and gas industry.
Last year was a year like no other, especially in the north-east.
Covid-19 lead to a crash in oil prices which had a crippling impact on the oil and gas industry. But oil prices are bouncing back and, with several Covid vaccines being rolled out, there is cautious optimism for 2021.
While the industry will continue to be the driving force of the region’s economy, we expect further transition into other technology-based work in 2021. The further development of renewable energy will provide opportunities for technology-rich companies and new start-ups to thrive.
CMS has undertaken research on the oil and gas industry to assess whether firms are looking at changing their strategies and investing in a more diverse energy portfolio.
Nearly all the companies in our sample are addressing energy transition as a result of a combination of multiple drivers and pressures in the market.
The challenge and the opportunity for many companies is how they can adapt products and services for renewables.
As financial support in terms of subsidiaries is removed from renewables over time, it is critical they become ever more efficient in order that the development and operation of assets, such as wind farms, will be financially successful.
It is not just large companies developing technology in this area. Through our CMS EquIP program, we have seen start-ups develop key technologies.
We are optimistic the region will start to recover in 2021. Oil and gas companies will continue to drive diversification of their businesses, and the environmental and social governance agenda will mean they will continue to invest in renewable assets.
There is a huge opportunity for oil and gas service companies which can adapt their services to renewables. They will be well placed to prosper in the evolving energy sector in 2021.
CMS is dedicated to supporting businesses adapt and find new ways to succeed. Get in touch to find out how they can help you here.